Can a car insurance company pay out without contacting the policy holder?

lisyloo

I wonder if it is possible that the insurance company did write a letter, which could have been lost in the post and the letter may have said something like, if we do not here back from you by (a date) then we will pay out.

It's possible, but if that is ALL they do to prevent fraud then it's pitifull.

I am amazed that I get cold calls all the time, but people that want to speak to me can't get in touch despite having 3 phone numbers, an address and an email address.
Sorry but I an somewhat cynical about the "lost in the post" excuse.
If I had £3K at stake, then I'd make it recorded delivery or make the effort to pick up the phone.

cord123

Exactly the same thing happened to me with direct line. My windmirror hit someones car at the train station. It left tiny scuff on the passenger door. She said not to worry, she was sure her husband could sort it out, i gave her my number and said ring me if there is a prob or any costs to be paid..... 4 months letter I get a letter from direct line saying that the claim had been settled! She can claimed for a whole new side panel, new tyre and hubcaps it was outrageous! I rung them and they said that they were happy that the damage and the story matched. Such a joke!

System

£3K to you and me is a large sum, but to an insurance company who may have a turnover of £millions, £3K becomes chicken feed, but still, it does not excuse the insurance company from not verifying the claim and informing the OP of the payout so that they had the option of repaying the company if they wished.

System

cord123 wrote: »

Exactly the same thing happened to me with direct line. My windmirror hit someones car at the train station. It left tiny scuff on the passenger door. She said not to worry, she was sure her husband could sort it out, i gave her my number and said ring me if there is a prob or any costs to be paid..... 4 months letter I get a letter from direct line saying that the claim had been settled! She can claimed for a whole new side panel, new tyre and hubcaps it was outrageous! I rung them and they said that they were happy that the damage and the story matched. Such a joke!

Did you inform your insurance company about the accident ?

lisyloo

She can claimed for a whole new side panel

This may be genuine. I put a dent in my car door once. It could not be pushed out because there was lots of "mechanism" behind it, so it would have meant deconstructing the entire door, which was more expensive than a new one.

I rung them and they said that they were happy that the damage and the story matched

Had you already reported the accident and put in your side of the story???

InsideInsurance

An insurer has the right to settle a third party claim as they see fit.

I would be highly surprised if the insurers made no effort to contact you to validate the claim against you. Insurers however can be lazy and just send out letters without trying to phone etc. People frequently disregard from insurance companies when they aren't expecting to receive them assuming they are just junk mail. As a previous test a former client sent letters to 10,000 customers advising them they'd been randomly selected for 3 months free insurance to be added to their existing policy and they only had to call a freephone telephone number to claim it. The response rate was less than 5%.

lisyloo

£3K to you and me is a large sum, but to an insurance company who may have a turnover of £millions, £3K becomes chicken feed

Agreed and I did anticipate someone might come back wiht that :-)
The problem is that this sets a precedent.
People now know that if they keep their claim small that no questions will be asked and they might also be able to get a few other things fixed on the side whilst they are at it as no-one's asking any questions. It might not even be the right car, but they still go ahead and pay out just on the 3rd parties say so (good fodder for antagonistic wronged ex's I would say).
If there are thousands of these fraudulent claims then the amount does make a difference, but I guess the industry doesn't care as they can just put up premiums.

lisyloo

An insurer has the right to settle a third party claim as they see fit.

Without even checking it's the right car involved ????!!!!

InsideInsurance

If they want to, yes

Ultimately insurers are in the business of making money rather than paying out every spurious claim that they come across. They do however have to balance the cost of fighting claims over the cost of settling them

lisyloo

They do however have to balance the cost of fighting claims over the cost of settling them

I do understand that.
I'm just suprised they pay out without checking they have the right car. Seems totally open to abuse or mistake e.g. slightly wrong reg.